L&O Holding GmbH - German Holding Company Acquires Manufacturer in U.S.

Challenge

L&O Holding GmbH is a German holding company with two operating divisions: weapons including hunting guns and industrial fabrics and consumer products. L&O sought to add a U.S.-based industrial fabric manufacturer, Vita Nonwovens, to the fabrics portfolio. Vita, with locations in North Carolina, Texas and Indiana, had been part of a larger group that L&O acquired several years earlier but Vita was not included in that acquisition. Instead, Vita was ultimately purchased by a private equity group in October 2014. L&O immediately began discussions with the private equity group about acquiring Vita. At that point, Arnall Golden Gregory, which has represented L&O in a number of earlier U.S. transactions, became involved.

Approach

AGG assisted in negotiation of the letter of intent and handled the buy-side due diligence, which entailed a detailed review of the target business, identifying assets and potential liabilities and laying the groundwork for a transaction that fits the reality of that business. AGG advised the client on any risks that were uncovered. AGG also negotiated on the buyer’s behalf transaction documents and post-closing employment and equity-incentive arrangements for senior managers.

Result

European companies are looking to diversify out of Europe to follow their customers and pursue overseas growth opportunities, especially in the U.S. L&O, in particular, wants a stronger U.S. presence. This deal involving L&O’s fabrics portfolio was an easy add-on expansion. By adding Vita (and other companies), L&O expands its capacity for innovation and development in the international market, and can better respond to customer demands going forward. Today, L&O is in the Top 10 worldwide in the non-woven fabrics sector.